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ARCHIVED DISCUSSION FROM 5/20/2000 All times are U.S. Mountain Time (Yesterday's Discussion.) ORO (5/20/2000; 23:40:53MT - usagold.com msg#: 30928) Elwood - thanks ; Howe comments http://www.goldensextant.com/commentary12.html#anchor29020 ElwoodThanks for pointing out the error. Was in a hurry to post (as I usually am) and did not read it over or edit (nor run a spell check - which I rarely do anyway).TC, Elwood - Fed does sound like ECBHowe did a marvelous job of combing for data and running through the data.The question is now a matter of who is long and who is short. I think it was Buffet who said: it is only when the tide turns that you see who was swimming without his trunks. So did Morgan give up its golden swim shorts so that Deutsche and UBS could get out of the water? Or are Deutsche and UBS also without cover and running with Morgan into deeper waters so as to avoid exposure as the tide turns? If they headed towards deeper waters, don't they think they will have to go out at some time? Surely the bus will leave them behind before the next day's tide comes no?I am thinking through the possibility that the Deutsche and UBS positions are longs being used to cover their exposure from their gold banking businesses. Gold banking would obviously be a short gold position, with the offsetting position being in something other than gold. If these institutions knew what was happening, they would seek cover from price changes, but may think themselves immune to a bank run because of a deal cut with some of their larger gold account holders. The factors that point to this:1. During Q2 99, Morgan's positions rose at nearly the same amount as BT levels dropped (BT was then purchased by Deutsche). 2. Credit Suisse has a strong physical business, and it is the bank that took the Fix seat, Deutsche and UBS would obviously have had at least a bigger paper gold business. Why did neither join in?3. UBS eliminated nearly 1/2 its forwards positions in 1999 (3370 to 1810 tonnes, down 1560 tonnes). It raised its position in options from 3970 to 5000, which comes to a 1030 tonne increase. With such a decrease in gold forwards, it should be no surprise that the lease rates dropped back down.The forwards are probably sheer shorts. The options may actually be long positions to offset some of the price exposure in the gold accounts. Since both are in the EU block (Swiss gaining an indirect entry) I would assume Deutsche has the same problems that UBS had and found Morgan's manipulative hand across the water to be a godsend.4. Euro prices of gold are at the same position they were in Feb 2000 and Oct 1999. They are actually a wee bit higher than Oct 1999. So Deutsche and UBS are showing good values on their Euro and SF books if they are long, while Morgan is showing good values on its US dollar books if they are short. This works out to a situation where the currency markets (where currency can be borrowed into existence without limit, theoretically) give when gold pushes. Deutsche and UBS provide gazmillions in fresh Euro and SF to Morgan and Citi in return for paper gold cover. Morgan and Citi get to profit from the carry between Euro and SF rates and the dollar rate (now a 3% + spread). Everybody is now happy and we can wait for Morgan and friends to keel over a wee bit later - after the (possibly hostage) NY Fed "earmarked" gold is released.What say you. elevator guy (5/20/2000; 23:31:48MT - usagold.com msg#: 30927) Can I get an amen? ! elevator guy (5/20/2000; 22:41:45MT - usagold.com msg#: 30926) Rules of Life If you went into someones house, and just lit up a smoke without asking, wouldn't that be considered arrogant?Of course it would.MK is a business man, and he is entitled to compensation for hosting this site.Why should MK have to lay all his cards on the table with regard to purchase and sell premiums? How do dealers of anything make any profit on the transaction? Do people who buy and sell have a right to deal the best they can, and so to stay alive?Of course they do. Life is a deal. Nothing is free. Business owners should not have to jump through a hoop any higher than anyone else.Kind of reminds me of some people in California, who want (they may have succeded by now) to make it a law that gas stations must provide free compressed air. Some people right away chant "Well, air is free, so why should I have to pay for it?"But it costs money to compress the air, for electric power, and the reel gets worn, which requires maintenance, etc etc.Why shouldn't the provider of a service be compensated for doing so? OK, enough for now. Just my $00.02 USAGOLD (5/20/2000; 22:36:47MT - usagold.com msg#: 30925) THC Normally, I wouldn't do this but since it caused such a controversy, here's what got THC kicked off:THC (5/20/2000; 3:25:16MT - usagold.com msg#: 30879)SolomonThis is the type of gold I like to accumulate:http://cgi.ebay.com/aw-cgi/eBayISAPI.dll?ViewItem&item=328885129It's hard to get at these prices (I lost this bid), but satisfying when youdo......Cheers,______________Go to it and see for yourself. Our prohibition #4: "4. Self-promotion; promotion of the company you work for; promotion of internet sites thatcompete directly with USAGOLD/Centennial Precious Metals."Further""However,we reserve the right to delete any posting we feel to be in conflict with the guidelines, and/or thespirit of the guidelines, listed below as PROHIBITIONS. We also reserve the right to denyany poster access who either violates these prohibitions or their spirit."Promotions are normally dealt with severely and quickly here, usually without warning. We have had a number of people get a code simply to publish a prospectus or the latest on hot mining prospect, or another gold web site. This isn't the first instance in which we've had to deal with promotions and a questionable agenda and it is unlikely it will be the last.We have the right and duty to protect our own business interests. We do not sell advertising here. We do not offer the Forum by private subscription and the site as a whole by private subscription. Our only source of income from this site is by the gold buyers who come to us as a result of what they read not just at this Forum but throughout the site. Should we let our competitors have a free ride at this forum that we have worked so hard to build and maintain, not to speak of the cost in man hours and the rest? THC violated the rules blatantly without so much as a thought what it might mean to the rest of us particularly the firm sponsoring the site. Analyzer (5/20/2000; 22:24:12MT - usagold.com msg#: 30924) Banishment As a very occasional poster and a regular reader of this forum, I have viewed the various 'banishments' of posters on this forum with some alarm. I have digested all of the arguments based on the idea that the proprietor if a private forum has a right to censorship and I suppose I agree, but I would also imagine that a believer in free markets and free currency systems might also have some belief in free speech, and some tolerence for even ad-hominem criticisms of his ideas. This latest banishment goes far beyond what I would consider a reasonable reaction (I read the original posts) and as a result I am withdrawing from any further participation in this forum. No doubt this message will also be deleted, but perhaps someone will read it before then and give some though as to what the ideals of the proprietor of this forum are, and what you might wish they were. lamprey_65 (5/20/2000; 22:11:22MT - usagold.com msg#: 30923) Elwood Your idea about an RTC type setup could be very possible...they may have wanted to consolidate the problem in order to manage it more effectively.By the way...watch the markets this week, there are several signs (low volume - no buyers, CSCO breaking the trendline established in the fall of '98 for the first time, many sectors continuing to deteriorate) leading me to believe the next leg down is drawing near. This is where things could get real ugly. Elwood (5/20/2000; 22:02:47MT - usagold.com msg#: 30922) Solomon Weaver (5/20/2000; 20:59:27MT - usagold.com msg#: 30920) Excellent points you raise, Sol. Could they all realize now that we're headed for cash settlement? Maybe consolidating everything is a way of sorting out who will get the physical and who must settle for currency. Remember the S&L crisis? They came up with something called the RTC: Resolution Trust Corp to settle up all that mess. Maybe that's what JPM and DT are doing. We're not supposed to know, otherwise we might go out, and try to buy some gold. MK, has my 20 mark order gone out yet? ;-)ORO (05/19/00; 23:36:04MT - usagold.com msg#: 30874)Oro, I re-read my post, and it sounded a little harsh the second time. Hope you didn't take it that way.TownCrier (5/20/2000; 13:13:42MT - usagold.com msg#: 30889)TC, liquidity problems abound for dollar assets. Treasury futures volume is dying. Summers is going hoarse trying to jawbone the business into the Treasury markets. The buyback is a joke among traders (or so I hear). It's a mess. Funny, but authorizing corporates for the Fed makes them look a little like the ECB, no? JLV (5/20/2000; 21:32:46MT - usagold.com msg#: 30921) Specials? He doesn't normally conduct business via the Forum (except for occasionally mentioning "specials").If 'specials' are promoted on the forum, doesn't MK open himself up to a full disclosure?Kind of a fairness thing? Solomon Weaver (5/20/2000; 20:59:27MT - usagold.com msg#: 30920) How bad is the big bad wolf (Deutsche Bank)? Regarding Deutsche BankGiven that the books of BANKS are published and the books of trading houses are not is it not hard to determine where all these new Deutsche Bank gold derivatives are coming from??Is this a plausible scenario?1. DB initiates and supports the pro-gold stance which leads to the WA agreement.2. The gold world is shocked when in the weeks after WA agreement, the POG surges and destroys two mining companies and untold numbers of bankers who were short.3. In order to prevent massive cross cascading defaults from destroying the emerging Euro (and DB counterparties), DB strikes a deal with the Bundesbank to have DB be a buyer of last resort to keep the gold trade working...with the promise of a bailout if it does not fly.What this article seems to confirm is that on both sides of the Atlantic, there has been a "pooling" of gold exposure into the hands of a few....thus setting us up for much smaller board room negotiations and insider deals....The question which is still unanswered is when the currency wars unfold, will DB and JP Morgan play the same??? Like a game of dungeons and dragons...what are the actual tricks that each have in their bag (the real breakdown of all those notional values)? Leland (5/20/2000; 20:55:45MT - usagold.com msg#: 30919) Leigh, Your Point is Well Taken... The ladies and gentlemen on this forum, please excuse me. Leigh (5/20/2000; 20:46:50MT - usagold.com msg#: 30918) Leland Not at all. Leland, however any of us feel about THC's banishment, MK probably wouldn't want us reposting his complaints. Just a thought. Leland (5/20/2000; 20:39:34MT - usagold.com msg#: 30917) Leigh, I Think This was Really Intended for You... Date: Sat May 20 2000 22:17 THC (Leland / USA Gold) ID#375365: Copyright © 2000 THC/Kitco Inc. All rights reserved Since you have posted some of today's posts at USA Gold, please also post this. ************ To everyone at USA Gold, Let me first state that I have learned much through participating in the USA Gold forum. I thank all of the participants and the host for taking the time to share their ideas. I have learned much about the "risks of gold shares" and the "stability offered by physical metal." I feel that this is an important message, one that more investors should be aware of. Investors need to understand the risks/rewards of all metals related vehicles. BUT BUT BUT BUT BUT I cannot imagine why I would be banned from the site for asking what I see to be a common sense question. For an asset to offer liquidity, one must be able to sell it, not just buy it. Why was I banned for asking the very simple question: gAt would premium would the seller buy back the coins?h In any case, good luck and many thanks to all. I would like to give an especially hearty thanks to **ORO**, whose posts and innovative economic thinking I have enjoyed to no end!!!!!!! Leigh (5/20/2000; 20:15:39MT - usagold.com msg#: 30916) THC Dear THC: I have just read through all of your postings on Kitco and Gold-Eagle. I can imagine that being banished is a shocking experience, and believe me, I feel for you.The question you asked MK was a rather bold one, similar to going into a shop and asking the owner (in front of many other customers) how much he or she has marked up an item. If you really felt the need to ask it, wouldn't it have been more tactful to call or e-mail MK personally? He doesn't normally conduct business via the Forum (except for occasionally mentioning "specials").Yes, it would have been nice if MK had given you an explanation for your banishment. He probably still would, if you were to contact him. An apology from you for your brashness might be appropriate, too. That's if you're in the mood to mend fences, rather than burn them down. Solomon Weaver (5/20/2000; 20:03:23MT - usagold.com msg#: 30915) making gold JLVMaking gold from lead was the dream of the European alchemists and this quest set the foundations for modern chemistry and physics...so we could say had the search for making gold (transmutation of elements) not been made...all of our modern lifestyle would never have happened.As it stands, transmutation of elements does occur in nuclear reactors....but it seems to me with cash costs close to $200 an ounce, it is best just to stick with mining.Poor old Solomon JLV (5/20/2000; 19:54:44MT - usagold.com msg#: 30914) What if. I almost never post here. I read the postings often though, and have read Another/FOA/TG's thoughts for quite some time.I hold gold bullion in the form of American Gold Eagles.There is a question I never hear raised on this forum. It's such an obvious question.I'm sure several here are familiar with the scientists, that a few years ago, spelled out the letters I B M in atoms on a piece of substrate.My question is, what if? What if the United States, through its Star Wars (or other) research, has accompliashed the alchemist's dream.What if the United States has discovered an inexpensive way to make gold. Is that far fetched for the year 2000?Does it explain how they have acted with regard to gold?How does it affect the Another/FOA/TG scenario/timeline?I seem to remember a few posts some months back claiming a very large unidentified source of bullion.Probably just a silly question. Cavan Man (5/20/2000; 19:11:14MT - usagold.com msg#: 30913) PH, HI-HAT, TG The rise in POG is imminent; I believe strongly. There are too many excellent reasons to own gold at this point in history in addition to the FOA thread. In sales, when a teriffic deal just lands on your doorstep one day, without you having done anything to get the business, we call that a "bluebird". The FOA/TG rationale is a "bluebird".I am very much looking forward to hearing from FOA on this score. I'm sure he can explain. As regards his friends, although I am a very patient person as all gold investors must be, I do believe the time is nigh for them to "fish or cut bait" as we are wont to say in the midwest.Does the Washington Agreement have any teeth? TG: Where's the beef? Kind regards.....CM Elwood (5/20/2000; 19:10:40MT - usagold.com msg#: 30912) Jigsaw Continued.... I think I might have got some edge pieces jammed in the middle somewhere.If the leased metal never left the central bank vault that would change things. Anyone? Leland (5/20/2000; 18:31:33MT - usagold.com msg#: 30911) And Then, why?, why? Should Someone Spread Something at Gold-Eagle? I Can't Imagine! "@THC (hh) May 20, 20:21 I've always found USA Gold's slant to be overly pro-physical to the exclusion of other means of precious metal investment. While physical should obviously be a portion of any PM portfolio, as insurance for a worst case (low probability) scenario, it is certainly not to be focused on to the exclusion of all others if a substantial leverage and subsequent profit is to be realized during typical (higher probability) circumstances. Gold-Eagle provides a forum with a much more balanced and open discussion. Welcome to the real deal THC." Leland (5/20/2000; 18:13:42MT - usagold.com msg#: 30910) Snips, Slaps, Exactly What Michael Doesn't Want Any of Us to do! Thanks Michael, we will honor your site!"Date: Sat May 20 2000 20:03 THC (BEWARE OF CENSORSHIP AT USA GOLD!!!) ID#375365: In a recent post at USA Gold, I noted that the sell premiums on their "specially priced" German 20 Mark coins was 20%. I then asked how much premium they would buy them back for. No response directly from USA Gold, but after a short discussion with other posters, some posts were erased and my password removed, with NO warning. BEWARE!!! This begs the question ( which I was polite enough not to mention on USA Gold ) : Is USA Gold a true discussion site, or a marketing site for coins? Cheers, THC" Leland (5/20/2000; 17:14:45MT - usagold.com msg#: 30909) RossL Your advice is VERY MUCH appreciated! Of course, I willneed an expert, expecially with that 1879 CC. And, whileI'm at it, the rest can be evaluated much more cheaply asa group. Muchos, amigo! HI - HAT (5/20/2000; 17:10:54MT - usagold.com msg#: 30908) Leland msg. 30899 Road Rage I hope I live long enough to read the full History of the who, what, where, and why of this whole gold manipulation Saga.It is going to be some Tale. Just think we have yet to see,further up ahead, the results of all this manipulation. RossL (5/20/2000; 17:05:43MT - usagold.com msg#: 30907) Leland You will have to make a decision on each coin. Is the coin worth more in a PCGS slab or in that gov't package? It depends on the coin. In my opinion, and from what I understand, the gov't packaged coins on average deserve approximately a MS63 grade. The better examples that can earn a higher number grade will best be moved into a slab. Look at them closely and discriminately with a high powered loupe. Better yet, get someone else to do it who does not have an "emotional attachment" to the coins that will bias the opinion. I can say that because in the past I have unrealistically overgraded my own numismatic treasures! HI - HAT (5/20/2000; 16:54:47MT - usagold.com msg#: 30906) Cavan Man CAVAN MAN. Sorry for mis-spelling. HI - HAT (5/20/2000; 16:35:31MT - usagold.com msg#: 30905) Cavan Mam : PH in LA Gold Market And now this. Several weeks ago in a picque of frustration I posted a Rant to Trail Guide, wherein I stated I did'nt understand the gold market and the whole thing seemed rotten to the core. I'm felling my gut-level frustration was on to something ! Leland (5/20/2000; 16:28:50MT - usagold.com msg#: 30904) RossL I read you loud and clear...Morgans should be slabbed...But!how does one approach those GSA CC's in the little blueboxes with the certificate signed by Nixon? I've neverfigured this one out. Help! RossL (5/20/2000; 16:15:10MT - usagold.com msg#: 30903) Wow It's taking me all day to catch up on 4 days of posts!Leland - Are your Morgans certified in the plastic slabs?Topaz - old half dollars, 1964 and before are 90% silver. Kennedy halves from 1965-70 are 40% silver.I will second MK's nomination of the John Doe post for the HOF if that is still necessary. PH in LA (5/20/2000; 16:10:15MT - usagold.com msg#: 30902) Howe's latest commentary Reg Howe has released his bombshell essay at www.goldensextant.com in which he details his discoveries relating to the disclosed bullion positions at Deutche Bank. His research is impressive, especially to someone like myself who doesn't pretend to follow all his figures and logic. He unquestionably gives an impression of knowledgeable and detailed analysis supporting his conclusions: "...Why would Deutsche Bank participate in a cabal to cap the gold price, and far worse, continue to do so after the Washington Agreement? The Bundesbank is not only a signatory to this agreement, but also is rumored to have played a leading role in its adoption. For the Bundesbank to permit Deutsche Bank to act in this manner, with Dresdner Bank doing the same thing but on a smaller scale, suggests that long term monetary policy in the EA, particularly as it relates to gold, is in utter disarray, and that monetary cooperation between France and Germany is far more mirage than real."Indeed, the implications of the gold derivatives activities of these two big German banks in 1999 are so mind-boggling that further analysis must await another commentary. Their actions threaten not merely to sabotage the Washington Agreement, but also, and much more seriously, to jeopardize the euro itself. Those who believe in sound money look to the Bundesbank as a light in the darkness. For it to conspire against gold is as unthinkable as the act of the great baseball player that brought forth this plea from one of his young fans: "Say it ain't so, Joe. Say it ain't so.""Since Howe has wondered aloud in the strongest terms if it has been the Exchange Stabilization Fund (controlled by the President and US Treasury) and/or the Federal Reserve conspiring to supress gold for political reasons. Now the suggestion that it has been the Bundesbank all along? I eagerly await his promised further commentary. And I wouldn't mind hearing FOA/Trail Guide and/or ORO comment on this, either! Cavan Man (5/20/2000; 16:07:02MT - usagold.com msg#: 30901) Hello Trail Guide The latest Howe commentary if true (and it appears he has done good homework) is quite a bombshell! What are your thoughts on this revelation? Many thanks friend....CM SHIFTY (5/20/2000; 15:53:35MT - usagold.com msg#: 30900) Leland Funny you bring that up! I was looking for my 50 million German Marks from 1923, when I found my German Marks I also found my Gold customs units! Leland (5/20/2000; 15:39:35MT - usagold.com msg#: 30899) The RAGE OF THE DAY http://www.goldensextant.com/ And, I liked this comment... Hektor (Howe's Bombshell: Deutscher and Dresdner Bank) ID#402246: - are the ones who have been lying and leasing gold at a phenomenal rate, not the U.S. government. The Germans, of all people! The Germans, who have experienced the worst hyper-inflation in modern times! They have leased huge amounts of gold, keeping the POG down, the euro down, and the dollar high. They are lying because they are part of the Washington agreement and they have flagrantly violated it. What might happen? Will they be forced by the ECB and the French to foreclose the leased gold and put it all back in their vaults? Will they be forced to get their gold back by the German people? Will this lead to more transparency, since now we know that NOONE can be trusted? If they are forced to undue these leases, it will be explosive for the market. If they are not forced to undo them, then, what? Nobody's word and signature are worth anything? Leland (5/20/2000; 14:55:54MT - usagold.com msg#: 30898) Shifty, I Searched...It's a Mind Twister... Any ADVANCED numismatics helpers out there? Gandalf the White (5/20/2000; 14:55:26MT - usagold.com msg#: 30897) SHIFTY The Hobbits sure hope that you found this "note" in an old trunk in the attic ! That is the one they have been looking for all these years. <;-) SHIFTY (5/20/2000; 14:41:54MT - usagold.com msg#: 30896) Leland All 5,000 are in one bill.! Leland (5/20/2000; 14:35:42MT - usagold.com msg#: 30895) Shifty, You Just Might Have Some Collectables Maybe someone has more info. Hope this helps: "During the period from 1930 to 1950when monetary situation wasunstable, Central Bank issuedCustoms Gold Unit as a sole means topay for customs duty, while inother times, we use normal currencyto pay for customs duty as mostcountries do." SHIFTY (5/20/2000; 14:21:21MT - usagold.com msg#: 30894) Paper gold Going through some stuff today I found 5,000 customs gold units from the Central Bank of China. Does anyone know about these bills? What is a Customs Gold Unit?Any help would be swell!$hifty HI - HAT (5/20/2000; 13:57:06MT - usagold.com msg#: 30893) Town Crier Barron's Market Watch 5-22-00 MOGAMBO GURU _ Richard Daughty May 9 *[ The Fed gave the banks another $4.5 billion to play with last week. I wish someone would ask the venerable Alan Greenspan exactly where it is written in the charter for the Federal Reserve System that he is to provide constant, unlimited quantities of credit to the banks when it is not in responce to some actual crisis in the banking system. Protection of the banking system from unforeseeable systemic problems is the purpose of the Federal Reserve System, not the current unholy and moral hazard-laden provision of unlimited, out of thin air liquidity to make an outright gift to the banks so that they can make a bigger profit.]Yes Sir, we are EVOLVING away from Free Markets, and toward the higher forms of Capitolism by the week. TownCrier (5/20/2000; 13:52:46MT - usagold.com msg#: 30892) Gandy, they've already looked into it... but the current holders of the beanies effectively stopped the initiative when THEY wanted some form of collateral on the deal! It would seem that the Fed's provision of currency was not deemed to be adequate.It's all relative, based on what side of the fence you're standing on. Gandalf the White (5/20/2000; 13:22:09MT - usagold.com msg#: 30891) Question to TC AT THAT rate, do you think that the Fed will ever accept "Beanie Babies" for repo type of collateral?<;-) Gandalf the White (5/20/2000; 13:17:05MT - usagold.com msg#: 30890) More on Camamami's Golden FACTS IF my memory has not totally failed me, The Stanley Cup (the gift of a long-ago Governor-General of Canada) was also won by the Seattle hockey team before the ice melted here in the Pacific Northwest.<;-) TownCrier (5/20/2000; 13:13:42MT - usagold.com msg#: 30889) Watching evolution in real-time http://biz.yahoo.com/rf/000519/n19563285.html The Fed is evaluating new methods to adjust the U.S. currency supply (done through their daily repos or matched sales with assorted collateral--Treasuries, agencies, and mortgage-backed securities) given the situation that the favored form of collateral--U.S. Treasuries--are seeing reductions in issuance or outright reductions through the planned buybacks of up to $30 billion by the Treasury.Gerald Lucas, senior government strategist and director at Merrill Lynch, said in regard to the study that the Fed would "definately" continue its use of agencies and mortgage-backed securities for its daily market operations, but that, "When the time comes, they may expand in order not to favour one (type of collateral). What the Fed may very well do ... may be to include high-grade corporates also...." canamami (5/20/2000; 12:38:07MT - usagold.com msg#: 30888) Reply to MK - #30869 MK,Some corrections :-)Hockey contests are "games", not "matches".The Rockies were a franchise in the 1970's, which disbanded circa 1980. The current hockey franchise in Denver is the Colorado Avalanche (formerly the Quebec Nordiques). The Avalanche won the Stanley Cup (the gift of a long-ago Governor-General of Canada) in their first year of operation in Colorado. Peter Asher (05/20/00; 08:11:20MT - usagold.com msg#: 30887) Topaz msg#: 30880) >>> a few unexpected bargains --- Oz 0.50 cent coins (the round ones @ 80% AG or .3416 oz) is$2.25. So- doing the conversions, this equates to a Ag/oz price of US$3.76 <<<<<If your referring to Kennedy half dollars, those are 40% silver content which would be .2 oz. Silver, therefor $6.25/oz. More realistic, yes? Leland (05/20/00; 07:44:32MT - usagold.com msg#: 30886) Leigh, Your Article, Salvage of Flight 111... Reminds, respect to the grieving families is ignored. Letus hope an unforseen circumstance prevents, at least foranother 100 years. Black Blade (05/20/00; 06:56:36MT - usagold.com msg#: 30885) JP Morgan the Fence Sitter. http://www.stockcharts.com/commentary/clive/clive20000518.html Clive Roffey asks an interesting question. Check out the link above. This should provoke a bit of discussion I think. I heard the PGM news yesterday morning and finally found some confirmation. I think that this will be big news this coming week. Anyway, beer is loaded, fishing gear is in the truck, and hopefully fish are bitin'. I'm gone! Black Blade (05/20/00; 06:13:09MT - usagold.com msg#: 30884) PGM - Ditto! Goin Fishin' see ya'll Monday! DETROIT, May 19 (Reuters) - General Motors Corp. , the world's No. 1 automaker, expects to cut its use of palladium by 30 percent by 2002 because of instability in supplies and prices of the precious metal, a company executive said on Friday. GM will replace palladium, used in catalytic converters to cut down vehicle pollutants, through a combination of improved technology and increased platinum use, said David Andres, GM's purchasing director. "I can see platinum coming up about 10 percent from where it is," he said in an interview. In physical bullion markets, palladium fetched about $575 an ounce Friday morning. Platinum cost about $537 on Friday, after a sharp rally Thursday. Automakers last year used about 5.9 million ounces of palladium, about 63 percent of all the metal purchased in 1999. A substantial amount was accumulated in inventories, according to precious metals refiner Johnson Matthey. Russia produced about two-thirds of the world's 8.06 million ounce palladium supply. But it has starved the market of exports for months because of delays in issuing annual export quotas, driving prices to record levels over $800 an ounce in February. Black Blade (05/20/00; 06:09:08MT - usagold.com msg#: 30883) Confirmation on PGM news! Gold closes lower, platinum rallies on GM news Reuters Company News - May 19, 2000 11:38 LONDON, May 19 (Reuters) - Gold slipped back within range on Friday afternoon, postponing any sudden moves until after Tuesday's UK auction of 25 tonnes, dealers said. Gold was set at $273.15 a troy ounce at the London afternoon fix, down from $273.75 in the morning, while spot closed at $273.40/$273.90, down from Thursday's New York close at $273.00/$273.55. "Gold is holding above yesterday's lows but the upside will remain limited before Tuesday," a dealer said. Gold forwards were seeing lending which was keeping lease rates at lows around 0.3 percent. Dealers said gold was supported above $272.50 and capped at $275.00. Platinum gained on Friday on news that General Motors Corp. , the world's biggest carmaker, expected to increase its use of the metal in catalytic converters, which clean exhaust fumes. GM would cut palladium use by 30 percent by 2002 through a combination of improved technology and increased platinum use, said David Andres, GM's purchasing director. "I can see platinum coming up about 10 percent from where it is," he said in an interview. Carmakers last year used about 5.9 million ounces of palladium, about 63 percent of all the metal purchased in 1999. A substantial amount was accumulated in inventories, according to precious metals refiner Johnson Matthey. Platinum closed higher at $539.00/$544.00 from $530.80/$537.80 and palladium was steady at $570.00/$580.00 from $$569.50/$584.50. Silver held on to $4.95 but struggled to make any headway on the upside, closing at $4.97/$4.99 from $4.99/$5.01. Leigh (05/20/00; 06:04:10MT - usagold.com msg#: 30882) They're Really Desperate Now! http://www.the-times.co.uk/news/pages/tim/2000/05/20/timfgnusa02005.html Dive for Gems, Gold Shocks Crash Relatives - Insurers to Salvage Sunken Loot from Swissair Jet Wreck Black Blade (05/20/00; 04:58:44MT - usagold.com msg#: 30881) Major Auto Manufacturer to switch from Pd to Pt autocatalysts! Apparent news release from GM. PGM supply mystery deepens? The price action in platinum yesterday appears to be related to General Motors (GM) plans to switch from Palladium to Platinum in is use for the manufacture of autocatalysts. The announcement came yesterday, however, I am still looking for printed confirmation or an official news release. It would appear that the drawdown from this auto manufacturers own stockpiles are prompting this change-over as the Russians are unable/unwilling to deliver Pd. Platinum rose $17.20 today, and I would expect that the price will continue to climb as trading continues on Monday. I made this speculation some time ago, as the price of Pd was climbing on the TOCOM. The subsequent default of Pd paper on the TOCOM sent a very clear signal that Platinum and Rhodium would have to be acquired to fill the void as PGM autocatalysts are effectively required equipment on internal combustion engine exhaust systems throughout the developed nations. Apparently some have begun to recently figure this out and have begun purchasing Pt. Reliance on Russian deliveries of Pd can be a critical error in the Auto industry at this time. There apparently has been a "very" minor delivery of Pd in Switzerland earlier this month, however, the major consumers have awaken to the fact that time is short, and that the necessary deliveries of Pd are not forthcoming. Some PGM producers have begun to develop plans for expansion at their various mining projects in anticipation of the developing PGM shortage, However, this will take a lot of time to bring into production. This should be an interesting week, especially if the other Auto manufacturers make similar announcements. I expect that the TOCOM market for Pt should be a good indicator at Mondays' open. As the PGMs are pulled along, so will Au and Ag follow? We shall see ;-) Topaz (05/20/00; 04:14:42MT - usagold.com msg#: 30880) Buying below Spot! http://www.xe.net/ucc/ Solomon: THC: AllGreat site to do the Math:The recent spike in US$-vs-pretty well everything, has coughed up a few unexpected bargains ie: the going rate for (bulk)Oz 0.50 cent coins (the round ones @ 80% AG or .3416 ozt) is $2.25. So- doing the conversions, this equates to a Ag/oz price of US$3.76----- and in auch a recognised, tradeable form!!Ya cant help but LOVE this stuff at these prices, Bring on the WHEELBARROWS! Elwood (5/20/2000; 2:18:11MT - usagold.com msg#: 30878) Jigsaw Puzzles Ok, Trail Guide, you've been beatin' around the bush on this for awhile. Isn't it time we started putting these jigsaw pieces together? (smile)Euro people want to get away from the dollar inflation that is robbing them blind(I don't blame them, I do too.), or maybe they just want to do some robbing for themselves. I don't know. At any rate, they need help from the Arab oil interests. Arabs say, "OK, but give us a gold money, and the deal is done." Euro people say, "You got it." This kicks off the accelerated expansion of the paper gold markets gunned by the Euro and other CB lending and sales. Since the oil interests control the physical flow through the LBMA (courtesy BIS) all that metal ends up somewhere under the Arabian desert via Euro and American bullion banks. It's got to be this way because we know that central bankers don't really need the pittance earned by leasing gold. They earn plenty enough already at the printing press. If anyone could use the money it's the ECB. I'm not sure but I'm guessing that they haven't leased a single ounce.The bullion banks get the physical from the CBs and sell it many times using certificates and other paper derivatives as proxy for the physical. If it was strictly a matter of gold for oil the CBs wouldn't use the BBs to transfer their metal to the Arabs. They'd do it directly bank-to-bank and it wouldn't slam the market price. There's a reason for running it through the paper markets and that's to further inflate the dollar in order to kill it.Thus, the physical game is not enough. What destroys a currency is inflation, not mere competition from other currencies. The demand is there for the physical due to all the dollar inflation that's going on. Rather than bid outright for metal that's not there, the Arabs start another game. They begin trading their oil that's still in the ground for gold that's still in the ground. That is, the bullion banks have hedged their central bank loans with claims to future mine production which they now trade to the Arabs in return for claims to future oil production. But, while it may be profitable, doing this places the bullion banks on a one-way train to default. Now, they're on the hook for metal that's owed to everyone they've sold to (certificates, other derivative holders and Arabs), and everyone they've borrowed from (central banks).Then the Washington Agreement is sprung. With this the European central banks are saying no more metal for loans, and, by the way, where's the payment that's due on our outstanding? The bullion banks don't have the metal, nor do they still possess sufficient claims to the future mine production from which they can deliver or with which they could renegotiate the loans. We need the oil to run the economy so they can't offer those claims.The Europeans will have their gold by threatening to go to the open market, bidding up the dollar price until enough comes available to replace what they've loaned, but there's no real need to stop there since by that time there will be no need to hold now-worthless dollars. Perhaps this is why they don't need the WA gold for coverage? The Arabs will have their gold or we'll have no oil or much less oil which has the same effect. The derivative holders will have......well, let's just say they're about to learn the hard way that bank certificates aren't the same thing as cash in hand. The 2000 tonnes from the WA must be to protect the oil flow to the European economies by insuring that any gold-for-oil claims owed by European bullion banks are paid when due. All those new gold-oriented internet sites like GoldAvenue.com won't be selling, they'll be used for buying. Why would a banker like JP Morgan need the internet to sell gold?When the Americans can no longer deliver the required gold payments then either the oil flow will decline sending its dollar price higher or the price of gold will run because the Euro folks entered the market with their dollar reserves. Of course, either of these events will destroy the dollar as a functioning reserve currency. What makes this so elegant is that this is all they need to do. They don't need to fiddle with any other financial markets or anything.So, Trail Guide, would I be in the ballpark if I stated that the price of oil is rising because someone is late with their payments?If this scenario is correct then it's another piece of evidence that all physical gold advocates everywhere will eventually be vindicated. The world is about to say, "Gold is money, after all." However, don't underestimate the American administration. Remember, these men, more than once, were willing to risk the lives of other Americans, not to mention foreigners, to save their political hides. It's a safe bet that they'll do just about anything to keep the game going. Comments?Elwood Solomon Weaver (5/20/2000; 0:36:05MT - usagold.com msg#: 30876) (No Subject) But THCWhy would you go to the trouble of buying a few of these beautiful coins with the intention to sell them???If gold goes where we hope it will, you will have treasures you could never afford to get later on!!!!I hope that you have truly understood the value of holding the physical and that those contracts you trade are just for entertainment....gold in your palm requires no "counterparty" to call it an asset.Poor old Solomon Jon (5/20/2000; 0:30:00MT - usagold.com msg#: 30875) Inflation Trail As I've suggested before, I wish consideration could be given to establishment of regular commentary by Stranger, and perhaps others, in a section devoted exclusively to inflation.Thanks. ViewYesterday's Discussion.
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